To Save Our Infrastructure, Make Every Road a Toll Road

The gas tax is bad, and there's a better way forward.

A Vehicle Miles Traveled tax is a lot what it sounds like: a toll that applies wherever you go. Drivers pay by the mile, at a rate that reflects the actual cost of driving.

Getty Images

Few things exemplify the United States’ disconnect between personal freedom and collective responsibility like our automobile habit. Drivers travel at will, as long as they have money for gas and road snacks. But what they pay for that privilege, in the form of gas and other taxes, doesn’t come close to covering the costs of maintaining the roads on which they travel—let alone recoup all the productivity lost in congestion and the damage that tailpipe emissions do to our health. Compared to what society pays, driving is practically a free ride.

Transportation economists have long sought to make drivers pay their fair share without raising the federal gas tax—a political nonstarter. In recent decades, a broad swath of experts has settled on an idea with the potential to fix the three big problems that come with cars: road damage, congestion, and pollution. The answer? Charge ‘em by the mile.

It’s not too crazy to think some version of this might happen. The Highway Fund, meant to provide for road maintenance, is perpetually broke, because its current funding mechanisms are broken. Many states have studied, and some have even tried, what are known as Vehicle Miles Traveled taxes. It just sounds fair. But if the feds ever take the idea national, you can bet it won’t be as ideal as the one I’m about to describe.

Where Has All the Money Gone?

In 2017, the American Society of Civil Engineers gave US road infrastructure a D grade, noting that one out of every five highway miles is in poor condition—potholed, pitted, poorly painted lines, the full catastrophe. This is because there’s no money to fix them. Federal gas taxes were supposed to keep the Highway Trust Fund afloat, but politicians have refused to raise them since 1993.

“Funding for highways has basically gotten worse since then,” says Robert Atkinson, a longtime transportation policy wonk and current president of the Information Technology and Innovation Foundation. Unlike politicians, inflation doesn’t worry about reelection, and the 73 percent increase since 1993 means the 18.4 cents Americans pay per gallon is worth less than ever. As cars get more efficient, drivers are pumping less gas, exacerbating the problem.

Things are so bad that, since 2008, Congress has had to periodically cover the Highway Fund’s shortfall through (potentially illegal) transfers from the general fund—that is, tax money paid by everyone, no matter how much (or how little) they drive.

That’s just at the federal level. In a majority of states, direct user fees (gas taxes, tire taxes, registration fees, and so on) cover less than half of road spending, according to research done by the Tax Foundation. The perceived unpopularity of gas taxes leads many states to draw from their general funds to pay maintenance. So even if you spend the next year on your couch, exploring every inch of PlayStation 4’s Shadow of the Colossus rerelease, some portion of the taxes you paid for the console and game will go toward improving those real life roads you never use.

It gets worse, because shoddy roads slow cars down, worsening traffic—traffic that already costs American drivers an annual $75.5 billion in fuel and time that they could have spent working instead of listening to podcasts, according to a 2014 study by the Center for Economics and Business. Congestion adds to the cost for businesses providing goods and services via those roads. You better believe the price of your Sunday pork chop includes the overtime and excess fuel the driver of that delivery truck (whose CB handle is probably Porkchop) wasted sputtering through your city’s clogged beltway. These indirect costs from congestion add up to a staggering $45.6 billion. And that’s in 2013 dollars. Inflation is unforgiving here too.

Finally, let’s talk about health care costs. Numerous studies have linked tailpipe emissions and tire wear—which include both particulates and volatile gases—to a variety of health problems. An abridged list includes asthma, heart attacks, childhood leukemia, low birth weight, immune system damage, and lower fertility rates. The cost to the health care system and lost productivity comes to billions or trillions of dollars, depending on the study.

If your appetite for doom and gloom left you with some room for dessert, remember that personal automobiles account for about 17 percent of US greenhouse gas emissions. Depending on the county you live in, the effects of, and adaptations to, climate change could eat up as much as 30 percent of your local GDP.

A Fair and Balanced Remedy

More than a decade ago, Congress realized the funding problem was becoming intractable, so they recruited a bipartisan, independent commission of experts to find solutions. “We dug into the analysis on gas taxes, looked at electric vehicle adoption rates, and sort of came to the Vehicle Miles Traveled tax as the obvious conclusion,” says Atkinson, who led the National Surface Transportation Infrastructure Financing Commission.

A Vehicle Miles Traveled tax is what it sounds like: a toll that applies wherever you go. Drivers pay by the mile, at a rate that reflects the actual cost of driving. The idea is popular. More than half of states have looked into taxing VMT. The most prominent has been Oregon. In 2006 the state recruited 300 drivers for a pilot program, and outfitted their cars with GPS. For each mile, they pay 1.5 cents. (They are also exempt from paying the state gas tax.)

Oregon’s ruling class considered the program a success and enshrined it in law, capping participants at 5,000—presumably to limit any potential negative effects of having everyone suddenly opt out of the gas tax.

Your Car the Smartphone

Such limited trials have been fairly successful, but a simple price per mile doesn’t come close to tapping the VMT tax’s full potential. “This is a broad tool that allows you to adjust the price of driving based on a number of different factors,” Atkinson says. Consider the VMT framework a platform on top of which other fee structures could be layered.

In 2011, the RAND Corporation released a research brief that outlined how “rates could be structured to help reduce congestion and harmful emissions, metering devices could provide value-added services (e.g., safety alerts, real-time traffic information and routing assistance, and the ability to save money with pay-as-you-drive insurance), and the system could generate rich travel data for improved transportation planning.”

A VMT tax could tamp down on congestion by adding a few pennies to the per-mile fee during rush hour or when drivers enter city centers. (That second bit is also known as a congestion charge.) To control emissions, gas guzzlers could pay a higher per-mile rate.

The technological challenges are minimal. “Modern cars are essentially giant smartphones,” Atkinson says. It’s not difficult to imagine coupling a financial framework (like those used by extant tolling agencies) to a mapping application on your car. Older cars would be gas tax laggards—the fleet takes 10 to 15 years to fully change over. Even there, you could rig up a dashboard GPS unit capable of calculating vehicle miles traveled.

In any case, these mapping systems would need additional data. “Every road segment can be annotated by who owns it, prices by time of day, and notes saying who gets the money,” Atkinson says. At the end of the month, your car aggregates the various fees and sends your payment off to the relevant agencies—local, state, and federal.

How granular can this sort of externality-tracking get? Take tailpipe emissions. Particulates and volatile gases disproportionately impact children and the elderly. Municipalities with a heart could code a buffer around schools, hospitals, or retirement communities and charge a premium for people driving nearby. A city below sea level might implement a surcharge for greenhouse gas emissions, filling the coffers in preparation for battling rising seas. (Though the punitive attention would probably be better spent on big polluters like coal plants and the oil industry.) Hyperconscious mapping software might even be programmed to detect cars that spend too long idling in one place—more wasteful emissions. And real-time congestion mapping à la Waze has obvious implications for easing traffic.

While this sort of nuanced and dynamic system might seem excessive, something like it will be essential going forward. “If we do get to point where fewer cars are fueled by gasoline, we need to think of alternatives to gasoline tax,” says Jessika Trancik, an energy systems engineer at MIT. The gasoline tax now responsible for funding our roads.

No Panacea

All of this potential for equitably charging drivers is super exciting—unless you drive. The sense of revulsion you feel in response is partly why VMT taxes are more policy wonk fantasy than reality. Maybe you understand that the direct fees you pay for road use will actually lower the overall cost of living, as you spend less time driving, on better roads, through cleaner air. You probably still have reservations.

Like privacy. Government-installed tracking hardware in every car sounds like a rejected Black Mirror plot device. Such concerns are understandable, but not totally warranted. GPS systems can be rigged to only collect location information; no transmitting. That data would be stored in your car’s brain, then aggregated at the end of the month, with mileage totals organized by road type, time of day, and proximity to any pertinent landmarks. That total would ping your account, which would dispense the dollars—this is how multiagency toll networks like E-ZPass work. The cofounder of the libertarian Reason Foundation has even testified before Congress that GPS-based VMT collection systems could be designed such that they pose no significant privacy concerns.

And if you (or your elected representatives) still aren’t comfortable with that, the RAND Corporation outlined eight different technological categories capable of taking down Vehicle Miles Traveled information—ranging in sophistication from self-reporting odometer readings to toll-like transponders to GPS (which would be the most versatile and effective).

Other critiques concern equity. Poor, disadvantaged, and rural people tend to commute farther than the affluent, and drive less efficient cars. The gas tax already charges them disproportionately. A straightforward VMT would too. Any lawmakers crafting a Vehicle Miles Traveled framework would need to consider such concerns. Again, technology could come to the rescue, identifying drivers who merit discounts or subsidies.

For now, any arguments for or against VMT taxes are stuck in political gridlock. But Atkinson sees a glimmer of hope for road payment reform—Trump’s $1 trillion infrastructure promise might put Congress in a fund-raising full Nelson. And who knows—state-level interest in VMT taxes might foment into a national schema. The only sure thing is that freewheeling personal travel is running out of road.

Few things exemplify the United States’ disconnect between personal freedom and collective responsibility like our automobile habit. Drivers travel at will, as long as they have money for gas and road snacks. But what they pay for that privilege, in the form of gas and other taxes, doesn’t come close to covering the costs of maintaining the roads on which they travel—let alone recoup all the productivity lost in congestion and the damage that tailpipe emissions do to our health. Compared to what society pays, driving is practically a free ride.